In a significant move towards digital innovation, Panama City has announced that it will accept cryptocurrency payments for taxes and municipal fees. This decision, made by Mayor Mayer Mizrachi on April 15, aligns Panama City with a growing trend among global jurisdictions adopting cryptocurrencies for public services.
Starting soon, residents will be able to use major cryptocurrencies, including Bitcoin (BTC), Ether (ETH), Circle’s USDC, and Tether’s USDt, for payments related to bus tickets, permits, and more. This initiative is contingent upon the establishment of cryptocurrency-to-fiat payment systems, as outlined by Mayor Mizrachi on the X platform.
Historically, previous administrations faced challenges in implementing similar measures due to regulations mandating that local government transactions be conducted in US dollars. However, this time, a partnership with a local bank will facilitate immediate conversion of digital assets into US dollars, thereby bypassing the need for new legislation.
Panama City’s decision is part of a broader movement as municipalities worldwide explore the integration of cryptocurrencies into their financial systems. This includes leveraging digital assets as strategic reserves, aimed at protecting municipal finances from inflationary pressures.
This trend is not unique to Panama City. In the United States, Colorado began accepting crypto for tax payments as early as September 2022. Similarly, Lugano in Switzerland made headlines in December 2023 by allowing tax payments in Bitcoin, enhancing its reputation as a Bitcoin-friendly city. Vancouver, Canada, is also on the path to becoming Bitcoin-friendly, passing a motion to explore integration of Bitcoin within its financial framework.
Amidst these developments, North Carolina is also considering legislation that would establish cryptocurrencies as an official payment method for tax obligations. Titled “The North Carolina Digital Asset Freedom Act,” this bill, introduced by lawmaker Neal Jackson on April 10, reflects the increasing acceptance of digital currencies at multiple government levels.
This swift shift towards embracing cryptocurrency for practical uses underscores a pivotal change in how municipalities around the globe view digital assets. As more cities and states consider similar measures, the future of taxation and public expenditure could be transformed significantly—driven by the potential advantages of cryptocurrencies.
